Premiums on health insurance exchanges going up in 2016

Illinois residents who buy health insurance on Healthcare.gov for 2016 will pay higher premiums despite the rise of plans with smaller networks of physicians and hospitals that are supposed to control costs.

Across Illinois, 2016's second-cheapest silver plan is rising an average of 6.1 percent, according to the U.S. Department of Health and Human Services. Health insurance policies sold on the federal exchange are arrayed in bronze, silver, gold and platinum categories, with silver considered the mid-range plan.

Illinois' price hike on the silver plan compares favorably against a block of other states. Across all 37 states that rely on the federal exchange as the enrollment system for people who buy health plans under the Affordable Care Act, the cost of the second lowest-cost silver plan will increase on average 7.5 percent next year.

The average price provided by the federal government surprised some because carriers in Illinois, including Blue Cross and Blue Shield of Illinois, had requested double-digit premium increases for the year ahead.

Blue Cross spokeswoman Mary Ann Schultz declined to provide an average rate increase across its ACA plans because it would "be misleading to the consumer as the rate changes individuals may have personally received are impacted by a host of factors."

Land of Lincoln Health said its average premium increase across all of its individual and small-group plans is about 25 percent. The Chicago-based company will offer 18 plans in Illinois on the exchange. UnitedHealthcare, which offers 10 plans in Cook County, said its rate increase was in the single digits on average.

Pricing information about ACA plans is available after Healthcare.gov launched its window-shopping feature Sunday, a week before the ACA's third open enrollment period starts Nov. 1 for people who do not have access to affordable health benefits through a job. Health care experts predicted premiums would rise because insurers are paying out far more in claims for ACA enrollees than they expected. Under the law, insurers must sell policies equally to everyone, regardless of their medical history. Insurers also are receiving smaller payouts than they expected under a federal risk-mitigation program meant to help companies with costlier, sicker customers.

The Obama administration is encouraging people to visit the exchange and browse their coverage options. The premium increases in Illinois and nationally do not account for income-based tax credits that reduce costs for some people. About 8 in 10 who bought an exchange-based plan this year qualified for financial assistance, HHS said.

"For most consumers, premium increases for 2015 are in the single digits, and they will be able to find plans for less than $100 a month," said Kevin Counihan, CEO of the health insurance marketplaces.

Excessive costs led Blue Cross to eliminate its most popular individual plan sold on and off the exchange. The PPO plan had the largest provider network of any plan the company offered on the exchange for 2015 coverage. Consumers who bought the individual PPO plan before the first ACA enrollment season in 2013 can keep the insurance in 2016, the company said.

Humana also discontinued its individual PPO plan for 2016 in order to keep prices down in Illinois, said company spokeswoman Cathryn Donaldson.

Blue Cross will offer 17 individual plans in Cook County, including a PPO plan called Blue Choice with a narrower network of about 120 hospitals in the state. But the plan does not include physicians at some of the most well-known hospital systems in the Chicago area, including Advocate Health Care, NorthShore University HealthSystem, Northwestern Medicine, Rush Health and University of Chicago Medicine.

Blue Cross said it will automatically switch members enrolled in the broad PPO to the Blue Choice plan but people are free to shop for new options on Healthcare.gov.

While Advocate declined to participate in the Blue Choice network, the hospital system has teamed up with Blue Cross to offer a new HMO plan on the exchange.

The plan, called Blue Care Direct, is the lowest-cost Blue Cross option in Cook County, according to the federal exchange. With rare exceptions, the plan will not provide benefits outside of Advocate's network of 4,000 physicians, said Dr. Lee Sacks, Advocate's chief medical officer.

Advocate also set up a similar plan with Aetna in Cook County. "We think there's value in partnering with a health plan," Sacks said.

About 350,000 people in Illinois enrolled in ACA plans on the federal exchange at the end of the second enrollment season. The third year of open enrollment ends Jan. 31.